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ESSENTIALS FOR LEADERS AND THOSE THEY LEAD
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Edited by Rama Ramaswami Senior Editor, New York
It’s been decades since technology was the sole province of the ‘IT department,’ but even today’s more digitally savvy business leaders are finding that their knowledge of technology must go beyond the fundamentals. Nontechnical executives may not need to know the specifics of programming or network engineering, but it is critical for them to know what applications to deploy to grow their businesses. Technical leaders are pressured to move beyond simply managing IT to leveraging technology to create value for the organization; for example, the best chief information officer plays an active role in educating other leaders about technologies and their applications for the business. Here’s a roundup of the latest ideas and developments in technology that may help advance your organization.
AN IDEA
The pandemic sped up the adoption of digital technologies and highlighted their importance to business transformation. As new technologies emerge, leaders may want to consider anticipating their possible uses in their own organizations. In McKinsey’s Technology Trends Outlook 2022, Michael Chui, Roger Roberts, and Lareina Yee, along with other experts, identify and interpret 14 of today’s most significant technology trends based on five measures of activity: search-engine queries, news publications, patents, research publications, and investment. The results fall into two thematic groups—the Silicon Age, comprising digital and IT technologies, and Engineering Tomorrow, which includes physical technologies in domains such as energy and mobility. For example, Web3, a model for a decentralized internet, is a Silicon Age technology whose interest and investment scores rank in the top five of all the trends we studied. Leaders may find it helpful to view these trends in a global context: while some countries, such as the United States, have focused heavily on technological innovation, corporate Europe is facing tech gaps in several sectors.
A BIG NUMBER
4
That’s the number of technology trends to which senior leaders must pay special attention, suggests McKinsey senior partner Steve Van Kuiken. Taken together, these developments have the potential to reshape the way leaders run their companies. “I’d put them under the heading ‘innovation at the edge,’” says Van Kuiken. A key trend is that innovation—formerly confined to IT or centralized innovation groups—is now emerging everywhere, particularly among frontline workers. “If innovation is arising on the periphery, your people there have to have the confidence to embrace innovation, experiment with it, and imagine how it can be used to deliver better products and services,” Van Kuiken says.
A QUOTE
That’s McKinsey senior partner Sven Blumberg and other McKinsey experts on what candidates for technology jobs want and how organizations can provide it. Skill areas most in demand—such as DevOps (software development and IT operations), automation, customer experience, and the cloud—are experiencing acute shortfalls that will only worsen over time. Want a tech rock star to work for you? Be prepared to provide, at the very least, a culture that values technology, opportunities to solve interesting and inspiring problems, and a purpose that the candidate will find meaningful.
A SPOTLIGHT INTERVIEW
You don’t need an encyclopedic knowledge of technology to make effective business decisions. Thirty percent is the minimum threshold of digital fluency needed to succeed in a digital context, according to Harvard Business School professor Tsedal Neeley. In this McKinsey Author Talks interview, Neeley explains that the 30 percent rule was inspired by her study of English as the common language of global work. “Nonnative speakers of the English language need only 30 percent of what a native speaker has in order to fully contribute and participate in a global organization,” she says. “We applied this logic to identify exactly what people need [to understand the digital mindset],” which includes not only technical skills but also “a way of thinking about data, devices, and technologies as well as how we operate in an organization.”
HEAVY METAL
When thinking about technology, high-profile consumer-oriented companies often come to mind first. But lesser-known industrial technology propels some of the best performers in the US economy, as McKinsey senior partner Asutosh Padhi and coauthors Gaurav Batra and Nick Santhanam reveal in their forthcoming book, The Titanium Economy: How Industrial Technology Can Create a Better, Faster, Stronger America (Public Affairs, October 2022). These companies make products such as recycled plastic lumber and aerospace parts that support the United States’ largest industries. “I believe titanium economy companies are not well understood and not well appreciated,” says Padhi in this Author Talks interview. “I was hoping to shine a spotlight on what I think is truly an amazing set of companies that drive a lot of innovation and therefore job creation.”
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